Amendments to the law "On Consumer Credit" extend to mortgages the same rules for protecting the rights of borrowers, which have already proven their effectiveness in unsecured consumer lending. The PSC includes not only interest on the loan, but also any other related payments of the borrower — for example, insurance and other additional services, the press service of the Bank of Russia explained.
According to Mikhail Mamuta, head of the Service for Consumer Protection and Ensuring the Availability of Financial Services of the Central Bank, the restriction of the UCS allows balancing the interests of the lender and the borrower and protecting a person from excessive debt burden.
"Now it is more important for the financial market to preserve the solvency of customers, and not to compensate for their costs at their expense," he stressed Mamuta.
Recall that, according to the instructions of the Central Bank, the full cost of a mortgage loan includes:
• payments related to the execution and fulfillment of the terms of the contract:
- payments to repay the amount of the principal debt on the loan;
- interest payments on the loan;
- fees (commissions) for consideration of the loan application (execution of the loan agreement);
- loan issuance fees;
- commission for the opening, maintenance (maintenance) of the borrower's accounts (if their opening and maintenance is due to the conclusion of a loan agreement);
- fees for settlement and operational services;
- fees for issuing and annual maintenance of credit and debit cards
• payments arising from the terms of the contract:
- assessment of the mortgage subject;
- life insurance, mortgage insurance, customer liability insurance or collateral;
- expenses for notarization of the transaction;
- the costs of processing the transaction in Rosreestr.
Thus, having adopted 329-FZ — providing that the CPM under new mortgage agreements (concluded starting from July 3 of this year) cannot exceed the average market by more than a third — the authorities formally did not take into account the bankers' request not to introduce such a measure in the third quarter of this year.
As previously informed by the portal ERZ.Representatives of the Association of Banks of Russia (ADB) have made a corresponding initiative to the Government of the Russian Federation.
They were not satisfied with the average market and maximum values of the UCS for mortgages published by the regulator in May of this year, which were supposed to take effect from July 3 of this year:
• 10.74% and 14.32% — for mortgages for the purchase of real estate or debt refinancing;
• 12.3% and 16.4% — for mortgages for the purchase of land or the construction of a residential building.
According to ADB representatives, such values deprive banks of the legal opportunity to make a mark-up on their mortgage products in order to ensure their payback.
However, bankers' concerns arose when the Central Bank's key rate was still at 11%. Today it is 9.5% and does not exclude a further decline, therefore, it is very likely that the ADB initiative has already lost its relevance.
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